Earnings on impressions and clicks are losing their relevance. This method does not give a complete picture of the effectiveness of the advertising campaign and the ability to get high-quality traffic from people interested in the product. Unlike working with an affiliate program that uses a model of payment for the target user action. The affiliate gets paid for one action, and not for contextual advertising clicks. The amount of deductions in such a model can be much higher. And the advertiser sees an increase in conversion on the site several times and, accordingly, sales grow.
What Is CPA?
СРА (cost per action) is a payment model for online advertising where only certain actions of users on the advertiser’s website are paid. It is believed that this payment model is the most cost-effective, since with its help, the advertiser can measure the effectiveness of the affiliate who brought interested customers.
CPA can also be used as a name for a metric showing the cost of a target action. It is calculated by the formula “CPA = cost of advertising / number of targeted actions”. These actions include buying, installing, viewing, visiting, filling out a form. The advertiser chooses what user action is important to promote their product and what action they are ready to pay affiliates for.
What Is An Affiliate CPA Network?
СРА network is an intermediary site that allows site owners (affiliates) to receive additional income, and advertisers to increase sales using affiliate marketing tools. CPA is best suited for B2C businesses that promote consumer goods. But with B2B traffic, you can also benefit. CPA networks unite affiliates and advertisers on one platform for cooperation: the affiliate brings a potential client to the advertiser’s website, the client performs a certain action, and the affiliate receives a percentage of the transaction or a fixed amount from the advertiser. The remuneration to the affiliate is charged only after the expiration of the hold.
CPA networks are not only intermediaries for affiliates and advertisers. In order to ensure mutually beneficial cooperation, they perform the following functions:
- attraction of advertisers;
- attraction of affiliates, exclusion of unscrupulous agents;
- analytics of advertising effectiveness and calculation of targeted actions;
- analysis of the effectiveness of affiliates;
- creation of interfaces for agents during traffic affiliate marketing;
- calculation of the average payment for the target action.
The affiliate and the advertiser can choose a CPA network from ratings that are freely available on the Internet. Most often, networks operate on a prepaid basis. That is, a certain amount is deposited into the account, from which money is later debited to pay for the work of agents. In case of completion of cooperation with the CPA network, the remaining amount can be withdrawn to a card or account.
What Is An Offer?
An offer is a commercial offer of a partner in a CPA affiliate program. It contains all the necessary information about the source of traffic, the portrait of the target audience, the commission for the conversion, as well as a description of the affiliate program. The structure of an offer in CPA networks consists of a name, description, traffic restrictions set by the client, banners, an active link and conditions for traffic sources.
Offers are different, depending on the vertical. For example, nutra offers include dietary supplements, weight loss products, creams, powders, elixirs. Lifestyle offers are websites and mobile applications for lifestyle. Gaming offers are something that is completely related to online games, websites and game machines and television games.
To choose the right offer, you need to:
- Pay attention to the payment model, not its size;
- Assess limitations;
- Check statistics;
- Find out what the minimum amount you can withdraw from the affiliate program is;
- Be in touch with the manager.
Choosing a CPA Toolkit
To attract clients, CPA affiliate programs can use various tools:
- banners and ads, their feed based generation;
- teasers that attract attention with intriguing headlines and pictures;
- rotator links that independently distribute traffic;
- affiliate link to track the visitors attracted by a specific agent;
- tool for tracking abandoned carts in retargeting and email returning visitors.
Each CPA network may have a different set of tools, which also affects your choice. But most often, they duplicate their functions.
Basic CPA Terms
Lead is a potential customer who can make a purchase. In marketing, a lead is a person’s contact (phone, email) that is used in the sales funnel. An indicator of the quality of a lead is their willingness to make a purchase. Leads can be hot, warm and cold.
Offer is an advertising offer affiliates drive traffic to and receive rewards for. In other words, this is a product or service in the commodity CPA network, for example, a cream against fungus or a bet on a sporting event. The conditions of the CPA offer set out the requirements the affiliate then receives a reward for. The offer is the basis of sales.
Conversion is a set target action that the user must perform on the advertiser’s website. Thanks to this, the affiliate can receive their reward from the advertiser. Conversions are divided into percentage of revenue, pay per click, pay per lead, pay per action.
Hold is the time during which affiliate programs hold the withdrawal of money. When the affiliate brings a user to the site and they perform an action, the advertiser needs time to check that all the conditions of the offer are met. This processing time to confirm the target action is called “hold”.
Earn Per Click is average revenue per click on advertising materials. It is calculated as the ratio of the total net income from the sale of traffic to the number of clicks from which this income was received.
Landing page is a separate page that is created for advertising purposes to increase conversions. Its purpose is to convert page visitors into leads. The advertiser offers visitors relevant products, and in return wants to get their contact information. The key components of an effective landing page are a catchy title, relevant text, features and benefits, a subscription form, and an attractive image.
Lead price is the amount the affiliate spends to attract one potential client. At the same time, an advertising campaign can be considered effective if the leads are obtained inexpensively and bring high profits. The actual price of a lead is calculated as the ratio of expenses to the number of leads received.
CPA Limits
When working with offers, you should always carefully read what types of traffic can be attracted to a partner’s site and which ones cannot. Ignoring these requirements, the affiliate may be left with nothing, and the money earned will be returned to the advertiser. Allowed types of traffic include:
- SEO search traffic;
- contextual advertising;
- teaser advertising;
- traffic from social networks;
- banner advertising.
Prohibited Types of Traffic Are:
- contextual advertising for the brand;
- doorway traffic;
- motivated traffic;
- email newsletters;
- pop ups.
In CPA marketing, there are also fraudulent actions on the part of the affiliate. These are situations when the affiliate sends traffic to the advertiser’s site using bots and prohibited types of traffic. While CPA networks are constantly monitoring such actions, the advertiser must also be vigilant. Suspicions can be caused by high activity at night, many clicks from one IP address, too high or low conversion rates with a large traffic flow. If such instances are found, the advertiser should contact the administration of the CPA network they work with. If the affiliate’s fraud is confirmed, the CPA network will block their account and the advertiser will not have to pay them.